GDP-
Despite my desire to not write about the budget, three weeks out, with no US releases owing to the shutdown, I'm somewhat snookered. With the Pound continuing its steep path lower, investors were clearly not impressed with the Chancellor's comments, at least in FX.
What is an interesting aspect is that the Chancellor strongly explained her commitment to lowering inflation, she didn't expand on how this may be achieved, but it can be taken as a nod to the Bank of England to cut rates sooner rather than later.
Some have read this as a "we're on the case" directed at Andrew Bailey and other BoE officials, in the hopes that they buy the rhetoric and possibly lower rates early. Lowering rates early would possibly lift the economy as house sales increase, credit becomes a little cheaper and mortgage holders can calm somewhat.
The above chart shows this idea convincing some, showing the market estimate of the BoE's interest rate following their Thursday interest rate meeting. The chance given to a cut went from 25% to 30%, a sizable jump. Naturally, this has softened the Pound and I expect this to continue, at least until the BoE delivers its decision tomorrow.
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